Oil prices gain as market awaits signals on U.S.-China trade talks

REUTERS

TOKYO (Reuters) – Oil prices rose on Tuesday, reversing early losses on hopes that U.S. President Donald Trump may signal progress on trade talks with China in a speech later in the day.

Brent crude futures were up 31 cents, or 0.5%, at $62.49 a barrel by 0644 GMT, after dipping to as low as $61.90 earlier in the day.

U.S. West Texas Intermediate (WTI) crude was up 23 cents, or 0.4%, at $57.09 a barrel, having fallen to $56.55.

Worries about the impact on oil demand from the fallout of the 16-month U.S.-China trade war, which has weighed on global economic growth, sent prices lower on Monday.

Trump said on Saturday that talks with China were moving along “very nicely” but the United States would only make a deal if it was the right one for Washington. He also there had been incorrect reporting about U.S. willingness to lift tariffs.

Trump speaks to the Economic Club of New York later on Tuesday, and markets will be keen for any update on the talks.

“Positive commentary about a possible U.S. and China interim trade deal certainly helps, but the fundamentals are supportive,” said Virendra Chauhan, Oil Analyst at Energy Aspects in Singapore, pointing to an improved demand outlook.

“Six million barrels per day of refining capacity is due to return from turnarounds across November and December,” he said.

On the supply side, Goldman Sachs also cut its 2020 forecast for growth in U.S. oil production, which has surged in recent years.

The investment bank cut its growth forecast for next year by 100,000 barrels per day (bpd) to 600,000 bpd over 2019.

“We expect U.S. oil growth to decelerate into 2020 as many companies look to balance growth with capex,” Goldman Sachs said.

Elsewhere, U.S. data showed that crude inventories at Cushing, the delivery point for WTI, fell about 1.2 million barrels in the week to Nov. 8, traders said, citing market intelligence firm Genscape.

Cushing inventories had grown for five weeks in a row through Nov. 1, according to government data.

Demand growth may pick up in 2020 after a year of dashed expectations amid the U.S.-China trade war, Fitch Solutions Macro Research analysts said in a new report.

“Our data show that 2019 will mark the nadir of oil demand growth over the next five years,” Fitch Solutions said.

“We forecast demand to (grow) by around 0.5% this year, rising to 0.8% in 2020,” the report said, although it added that “trade and political risks remain extremely elevated.”

Oil inches higher after US crude stocks draw down, economic worries weigh

CNBC

Reuters
KEY POINTS
  • Brent crude futures climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1%, to $60.36 a barrel by 0242 GMT on Thursday.
  • West Texas Intermediate (WTI) crude futures rose 10 cents, or 0.2%, to $55.78 per barrel.
RT: Petrobras oil tanks Brazil 190725
People pass in front of tanks of Brazil’s state-run Petrobras oil company in Brasilia, July 25, 2019.
Ueslei Marcelino | Reuters

Oil prices edged higher on Thursday after a draw down in U.S. crude inventories, but lingering concerns over the global economy and a build-up in U.S. refined product stocks kept a lid on gains.

Brent crude futures climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1%, to $60.36 a barrel by 0242 GMT on Thursday.

West Texas Intermediate (WTI) crude futures rose 10 cents, or 0.2%, to $55.78 per barrel.

U.S. crude inventories fell more than expected last week as refineries hiked production, but gasoline and distillate stockpiles showed bigger-than-expected builds, the Energy Information Administration said on Wednesday.

Crude inventories fell by 2.7 million barrels in the week to Aug. 16, compared with analysts’ expectations for a drop of 1.9 million barrels. However, gasoline stocks rose by 312,000 barrels and distillate supplies grew by 2.6 million barrels.

“Amid mounting market concerns about a slowdown in economic and oil-demand growth, it might come as a surprise that crude oil inventories have actually been plunging,” analysis firm Kayrros said in a note.

Traders were worried on the prospects of global oil demand especially amid lingering trade tensions between U.S and China, the world’s two major economies.

“If trade uncertainties persist it will be difficult for oil to shrug off concerns about the threat to global demand,” said Stephen Innes, a managing partner at Valour Markets.

U.S. President Donald Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.

Asian shares edged ahead on Thursday after Wall Street got a boost from strong retail results, but minutes of the Federal Reserve’s July meeting showed policymakers were deeply divided over whether to cut interest rates as sharply as markets were wagering.

Meanwhile, oil markets were also supported by simmering tensions between the United States and Iran, with Iranian President Hassan Rouhani cautioning Washington against tightening pressure on Tehran.

If Iran’s oil exports are cut to zero, international waterways will not have the same security as before, Rouhani said on Wednesday.

Echoing Rouhani’s tone, Iranian Foreign Minister Mohammad Javad Zarif said Tehran might act “unpredictably” in response to U.S. policies under President Donald Trump.

Oil dips amid trade worries, but expectations of more OPEC cuts support

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Reuters

KEY POINTS
  • International benchmark Brent crude futures, were at $57.20 a barrel by 0324 GMT, down 18 cents, or 0.3%, from their previous settlement.
  • U.S. West Texas Intermediate (WTI) futures were at $52.45 per barrel, down 9 cents, or 0.2%, from their last close.
Reusable: Idled oil pump jack
An idled pump jack, once used to extract crude oil from the ground, sits above a well on the edge of a farmer’s field near Ridgway, Ill., Jan. 21, 2015.
Getty Images

Oil prices fell on Friday amid fears over demand as the U.S-China trade row casts its shadow over markets, although prices got some support from expectations of more OPEC production cuts.

International benchmark Brent crude futures, were at $57.20 a barrel by 0324 GMT, down 18 cents, or 0.3%, from their previous settlement.

U.S. West Texas Intermediate (WTI) futures were at $52.45 per barrel, down 9 cents, or 0.2%, from their last close.

Both contracts jumped more than 2% on Thursday to recover from January lows, buoyed by reports that Saudi Arabia, the world’s biggest oil exporter, had called other producers to discuss the recent slide in crude prices.

Oil prices have still lost more than 20% from peaks reached in April, putting them in bear territory.

Global financial markets have been rocked over the past week after U.S. President Donald Trump said he would impose 10% tariffs on more Chinese goods starting September and as a fall in the Chinese yuan sparked fears of a currency war.

“The tentative oil rebound could be short-lived as the U.S.-China trade dispute is providing no real reasons to be optimistic,” said Edward Moya, senior market analyst at Oanda in New York.

Bloomberg reported that Washington was holding off a decision about licences for U.S. companies to restart business with Huawei Technologies.

Meanwhile, Saudi Arabia, de facto leader of the Organization of Petroleum Exporting Countries (OPEC), plans to maintain its crude oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories, a Saudi oil official said on Wednesday.

“Saudi’s production in September will also be lower than it is currently. This helped crude oil rebound from its lowest level since January,” ANZ bank said in a note.

The United Arab Emirates also will continue to support actions to balance the oil market, the country’s energy minister Suhail al-Mazrouei said in a tweet on Thursday.

The minister said the OPEC and non-OPEC ministerial monitoring committee would meet in Abu Dhabi on Sept. 12 to review the oil market.

OPEC and its allies including Russia agreed in July to extend their supply cuts until March 2020 to boost oil prices.

Oil prices fall as trade tensions hit demand outlook

SINGAPORE/TOKYO (Reuters) – Oil prices fell on Monday amid renewed global economic growth concerns after U.S. President Donald Trump vowed to escalate the trade war with China with more tariffs, which would likely limit fuel demand in the world’s two biggest crude consumers.

Brent crude futures LCOc1 had dropped 92 cents, or 1.5%, to $60.97 a barrel by 0640 GMT.

U.S. West Texas Intermediate (WTI) crude futures CLc1 declined 73 cents, or 1.3%, to $54.93 a barrel.

Both crude benchmarks fell last week, with Brent down 2.5% and U.S. crude falling 1%.

Asian equity markets dropped to a six-month low on Monday while gold prices climbed as investors sought safe-haven assets because of the ratcheting up of the trade dispute between China and the United States, the world’s two largest economies.

“Crude oil futures experienced significant headwinds as global risk appetites remain feeble over subdued global growth and a sudden escalation in the Sino-U.S. trade dispute,” said Benjamin Lu, commodities analyst at Singapore-based brokerage Phillip Futures.

Trump last week said he would impose a 10% tariff on $300 billion of Chinese imports starting on Sept. 1 and said he could raise duties further if China’s President Xi Jinping failed to move more quickly toward a trade deal.

The announcement extends U.S. tariffs to nearly all imported Chinese products. China on Friday vowed to fight back against Trump’s decision, a move that ended a month-long trade truce.

On Monday, China let the yuan tumble beyond the key 7-per-dollar level for the first time in more than a decade, in a sign Beijing may tolerate further currency weakness because of the trade dispute.

The 1.4% drop in the yuan came after the People’s Bank of China (PBOC) set the daily mid-point of the currency’s trading band at its weakest level since December 2018.

A lower yuan would raise the cost of China’s dollar-denominated oil imports. It is the world’s biggest crude oil importer.

Signs of rising oil exports from the United States also pressured prices on Monday. U.S. shipments surged by 260,000 barrels per day (bpd) in June to a monthly record of 3.16 million bpd, U.S. Census Bureau data showed on Friday.

The trade war and rising supply should accelerate the trend of speculators reducing their bullish positions in the WTI futures markets.

Speculators cut bullish wagers on U.S. crude in the week to July 30, while bearish wagers rose to their highest since February, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday

However, speculators increased their bullish positions in Brent futures.

Also in the United States, the weekly oil rig count, an indicator of future production, fell for a fifth week in a row as most independent producers cut spending even though majors were still pushing ahead with investments in new drilling.

Iran’s seizure of an Iraqi oil tanker raised some concerns about potential Middle East supply disruptions in the Gulf. Iran’s state media reported on Sunday the Iranian Revolutionary Guards seized the ship for smuggling fuel.

Reporting by Roslan Khasawneh in SINGAPORE and Aaron Sheldrick in TOKYO; Editing by Joseph Radford and Christian Schmollinger

Oil slips 1% after Fed disappoints, US crude output rises

CNBC

Reuters
KEY POINTS
  • Brent crude futures, the international benchmark, fell 62 cents, or 1%, to $64.43 a barrel by 0405 GMT, having fallen more than $1 earlier in the session.
  • U.S. West Texas Intermediate (WTI) crude was down 67 cents, or 1.2%, at $57.91 a barrel, also having dropped more than a $1 earlier.
Reusable: Oil pump jack leased by Devon Energy 150922
A pump jack operates at a well site leased by Devon Energy Production Co. near Guthrie, Oklahoma.
Nick Oxford | Reuters

Oil prices skidded on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and Sino-U.S. talks ended without apparent progress towards resolving a bitter trade dispute.

Brent crude futures, the international benchmark, fell 62 cents, or 1%, to $64.43 a barrel by 0405 GMT, having fallen more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) crude was down 67 cents, or 1.2%, at $57.91 a barrel, also having dropped more than a $1 earlier.

The drops came despite a bigger-than-expected decline in inventories in the U.S. and a drop in crude production among OPEC members, along with Libya cutting exports, typically bullish drivers for the market. But U.S. output rose in a market that remains well supplied.

The Federal Reserve cut interest rates on Wednesday, but against expectations the head of the U.S. central bank said the move might not be the start of a lengthy series of cuts to shore up the economy against risks including global economic weakness.

“Supply is plentiful and demand growth is showing signs of weakening globally because of trade conflicts, Brexit and other events that tend to potentially weaken economic growth and, hence, oil demand,” Victor Shum, seniorpartner at IHS in Singapore said by phone.

“There’s a lot of oil out there. U.S. output is growing strongly and in addition to that there is enough spare capacity in Saudi Arabia alone to offset any significant supply disruptions.”

A Reuters monthly poll showed oil prices are expected to be range-bound near current levels this year as slowing economic growth and the protracted trade dispute between the U.S. and China curb demand.

Meanwhile, negotiators from the United States and China, the world’s two biggest economies, wrapped up a round of trade talks on Wednesday without visible signs of progress and put off their next meeting until September.

U.S. crude oil stockpiles fell for the seventh straight week, declining to their lowest levels since November even as production rebounded and net imports increased, the Energy Information Administration said on Wednesday.

Crude inventories fell 8.5 million barrels in the week ended July 26, far exceeding analysts’ expectations for a decrease of 2.6 million barrels.

But output rebounded to 12.2 million barrels per day (bpd), near recent levels, from 11.3 million bpd a week earlier.

Oil output among members of the Organization of the Petroleum Exporting Countries (OPEC) hit an eight-year low in July as a further voluntary cut by top exporter Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found.

Libya’s state-owned National Oil Corp declared force majeure on loadings of crude from the country’s largest oil field on Wednesday.